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Will Wade, David R. Baker and Simar Khanna , Bloomberg News

Electrical transmission towers at a Pacific Gas and Electric (PG&E) electrical substation during a heatwave in Vacaville, California, US, on Tuesday, Sept. 6, 2022. California narrowly avoided blackouts for a second successive day even as blistering temperatures pushed electricity demand to a record and stretched the state's power grid close to its limits. , Bloomberg

(Bloomberg) -- California faces the dual threat of blackouts from an overwhelmed grid as well as from the risk of wildfires as a punishing heat wave continues to exact a toll on the state’s power system.

Edison International’s Southern California utility warned Thursday afternoon that it is considering cutting power to more than 50,000 customers to reduce fire risk in the drought-parched region. The warning could last through Saturday.

The alert came after the state’s grid operator had declared an emergency for a fourth straight day, asking residents and businesses to conserve power. The emergency level was canceled late Thursday without the need for planned outages, but a warning for a fifth-straight emergency on Friday is already in place. And now the system faces a new danger of wildfire smoke reducing generation from solar panels.

The threat of rolling blackouts has shaken confidence in the power grid, adding fuel to the debate over how quickly the state should transition to renewable energy and revived fears about the impact of climate change. It’s also contributed to higher gasoline prices in the state.

Read: Californians Can’t Catch a Break as Gasoline Prices Rise Again

Total demand is expected to reach 48.8 gigawatts, below the record high of 52 gigawatts achieved Tuesday. But the grid Thursday and Friday faces the prospect of much less solar and wind power.

Wildfire smoke and cloud cover reduced output from solar farms on Thursday and will likely cut generation by as much as 1 gigawatt on Friday, according to Elliot Mainzer, chief executive officer of the California Independent System Operator. Weaker wind gusts on Thursday and Friday are also diminishing another important electric source for the state.

“Conditions have changed,” Mainzer said, pointing to “uncertainty about how much production we will have from our renewable resources.” 

Edison spokeswoman Diane Castro said the threat of public safety power shutoffs may last into Saturday and would mostly affect customers in Los Angeles, Orange and Riverside counties. The utility is forecasting strong winds with the highest intensity between 6 a.m. and 6 p.m. Friday.

Also Read: Hurricane Kay Threatens to Flood California From Miles Away

The heat wave that started at the end of August has also taxed the natural-gas fired power plants that the state has relied on to help stave off outages. The longer these conditions endure, the risk of a failure will increase.

Sacramento has been above 100 degrees Fahrenheit (38 degrees Celsius) since Aug. 31. The high Thursday could reach 109, and 110 Friday before dropping to 91 Saturday and 88 Sunday. 

Also read: California Asks Refiners to Conserve Power During Grid Emergency

Californians are also seeing gasoline prices surge again despite summer travel season coming to an end. Pump prices jumped by more than 5 cents a gallon overnight in San Francisco and Sacramento, according to auto club AAA, and record wholesale premiums signal they could rise further. The state’s gasoline stockpiles are down.

(Updates with grid canceling emergency in third paragraph)

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Canadian employment levels unexpectedly fell for a third straight month in August and the jobless rate jumped, a potential signal interest-rate hikes have started to cool the tight labour market.

Economists are warning Prime Minister Justin Trudeau’s government against using windfall revenue to add to spending amid concerns about inflation.

The latest jobs data from Statistics Canada shows one-out-of-10 Canadians plan to leave their job within the next 12 months.

As borrowers bemoan yet another massive interest-rate hike by the Bank of Canada, savers are getting a long overdue reward.